Being a student can be a costly experience, particularly for those in cities with high living expenses, such as Sydney or Melbourne. Students who don't have the benefit of parents supporting them through their years of study will need to source funding that is realistic in terms of repayments. That's where a student personal loan could help, but is it the best option for you?

Find and compare student personal loans

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Advertised Rate

12.69%

Fixed

Comparison Rate*

13.56%

Company
NAB
Monthly repayment

$1006

36 months

Loan term

1 year to 7 years

Total repayments
Real Time Rating™

2.96

/ 5
Go to site
More details
Advertised Rate

6.95%

Fixed up to 17.95%

Comparison Rate*

8.57%

Company
Pepper
Monthly repayment

$926

36 months

Loan term

1 year to 7 years

Total repayments
Real Time Rating™

3.56

/ 5
Go to site
More details
Advertised Rate

12.69%

Variable

Comparison Rate*

13.56%

Company
NAB
Monthly repayment

$1006

36 months

Loan term

1 year to 7 years

Total repayments
Real Time Rating™

3.04

/ 5
Go to site
More details
Repayment

$606

based on $20,000 loan amount for 3 years at 6.47%

Real Time Rating™

4.08

/ 5
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Learn more about personal loans

What are student loans?

Student loans are a type of personal loan designed to help students pay for courses, university tuition and fees, as well as living expenses. They are a common feature of higher education in many parts of the world.

For those starting out at university, growing sufficient savings to fund your studies may feel nearly impossible. Even with a part-time job, this is not likely to give students a serious nest egg to fund their courses. For many young people – and mature students as well – a student loan from either a public or private source of finance is the only way to afford their education.

Taking out a student loan can be seen as an investment in your financial security over a number of years, as you're aiming to fund a course or degree that can improve your job opportunities over your career and have you earning more than you might otherwise have done.

Who can get a student loan?

Much like with all personal loans, education loan eligibility in Australia is up to the discretion of the lender you’ve chosen. 

For some lenders, borrowers may be considered for a student loan by simply having a certain residency status and meeting the minimum age requirement. While for others, borrowers may need to additionally meet a minimum annual income, have a good credit rating, and often more.

Check your preferred lender's eligibility criteria or consider reaching out to them directly for more information.

Do you have to be an Australian resident to get a student loan?

If you aren’t an Australian Permanent Resident, it's important to carefully examine the eligibility criteria of your preferred lender to see if they provide financing for non-permanent residents, like international students.

There are a range of personal loan lenders who provide finances for students, and one of the best ways to choose the most competitive product to fund your education is to utilise comparison tools, such as RateCity’s student loan comparison table.

Are there age limits on who can get a student loan?

Generally, the only age restriction placed on student loans is that the borrower is at least 18 years of age. This restriction applies to any kind of credit product.

Most lenders don't specify an upper limit in regards to age, but it's important to familiarise yourself with the terms of your preferred student loan before you hit the 'apply now' button, as each product will have different requirements.

What are the features of a student loan?

Feature  About 
Secured personal loan This allows you to put down an asset, such as a car or equity in a home, as security on your personal loan. This usually results in a lower interest rate as you’re seen as a less risky borrower, however if you fail to make your repayments, this security can be repossessed by the lender.
Unsecured personal loan Does not involve putting down an asset as security, and therefore usually comes with a higher interest rate. This type of personal loan may come with more flexibility though.
Tranche funding Some lenders can release your funds in portions throughout the length of your course.
Repayment schedule Lenders allow you to choose your student personal loan repayment schedules, such as fortnightly or monthly, allowing for flexibility in your budget planning.
Loan term The length of time you have to make loan repayments towards your loan amount, usually between two and five years.

What student loans can I get from the Australian government?

Student loans are one way to bridge the gap between what Centrelink is able to provide through assistant programs. According to StudyAssist, there are a range of government loans and subsidies in place, including:

  • HECS-HELP - a loan scheme to help eligible Commonwealth-supported students to pay their student contribution amounts through a loan or upfront discounts.
  • FEE-HELP - a loan to help eligible fee paying students to pay their tuition fees.
  • SA-HELP - a loan that assists eligible students to pay for all or part of their student services and amenities fees.
  • OS-HELP - a loan to help eligible Commonwealth supported students pay their overseas study expenses.
  • VET Student Loans - a loan program that helps eligible students enrolled in certain higher-level vocational education and training courses at approved course providers to pay their tuition fees.

Loans from the government can be attractive in terms of good repayment conditions, but not everyone is necessarily eligible for these, and even those receiving a government loan may need to consider taking out a student loan from a private provider.

How do I get approved for a student loan?

Approval for a student personal loan in Australia could depend on individual finances and the lender’s eligibility criteria. One of the best things you can do is to try and improve how reliable lenders perceive you as a borrower, as well as to research and compare your student personal loan options before submitting a loan application.

  1. Examine your credit history – If you have a bad credit history, your chance of approval for a student loan will be negatively impacted. If you have no credit history or a short credit history, lenders will take this into consideration for student loans, as most students are too young to have developed an excellent credit history.
  2. Pay off your debt – If you have existing debt from a credit card or another personal loan, lenders will see this when they examine your personal finances. Try to pay off your debt, or at least consistently meet your monthly repayment amounts to help improve your credit score.
  3. Regular income – Having a regular income source, such as a full-time job, will show lenders that you have stability in your finances. While having a full-time job can be near-impossible for many students, lenders can take this into consideration, and look favourably on those with casual or part-time work.
  4. Compare student loan options - RateCity's comparison tools, such as the student loan comparison table on this page, can help you ensure you’re getting the most competitive personal loan for your financial needs.
  5. Carefully examine the eligibility criteria of the lender - This is particularly important if you are an international student, to make sure you’re applying for a student loan you could be approved for.

Alternatively, you can consult a finance broker and let them organise the loan on your behalf. Often finance brokers won’t charge for the service; instead, they’ll earn a commission from the lender.

What are the pros and cons of student loans?

For many students, a student loan is essential to be able to manage finances during the period of study. Often with lower than average interest rates and favourable repayments terms, they can provide financial security while at university.

Further, for young students with non-existent credit history, lenders won’t necessarily reject your application. Instead, they may offer you a higher interest rate than someone with a great credit score.  

If you take out a student loan and are able to defer your payments, this might seem like it’s helping your immediate financial situation. However, that interest is likely to be charged on the loan right from the start, and after a number of years that can add a lot of money to what you will have to repay. 

Don't forget to also factor in any fees and charges, such as establishment fees, early repayment fees, and other ongoing fees or monthly fees, as they will also contribute to the overall cost of the loan.

  • Enables you to fund your education
  • Often lower than average interest rates
  • More understanding eligibility criteria
  • Risk of falling into debt
  • Deferring payments will lead to higher interest

Frequently asked questions

How long does it take to get a student personal loan?

Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.

Can students with no credit history get loans?

It is possible for students with no available history of borrowing or managing money to get a personal loan, though it may be more difficult as well as expensive than for borrowers with a good credit history.

Having no credit history means having no credit score. While many lenders may consider having no credit score to be better than having a bad credit score, they may still consider it riskier to lend to an unknown borrower and may charge higher interest rates or fees than to borrowers with good credit scores.

Do student personal loans require security?

While some personal loans can be secured by the value of an asset, such as a car or equity in a property, student personal loans are often unsecured, which typically have higher interest rates.

Some lenders also offer guarantor personal loans to students. These loans have lower interest rates, as a guarantor (usually a relative of the borrower with good credit) will fully or partially guarantee the loan, taking on the financial responsibility if the borrower defaults.

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.

Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.

Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

Can I get a bad credit personal loan with a guarantor?

Some lenders will consider personal loan applications from a borrower with bad credit if the borrower has a family member with good credit willing to guarantee the loan (a guarantor).

If the borrower fails to pay back their personal loan, it will be their guarantor’s responsibility to cover the repayments.

Can you pay off a quick loan early?

Many lenders will allow you to make extra repayments onto a quick personal loan when you can afford them, or even exit the loan early, which can help reduce the total interest you are charged. Be sure to check your quick loan’s terms and conditions, as some lenders charge early exit fees for paying off a loan ahead of schedule.

Can I get guaranteed approval for a bad credit personal loan?

Few, if any, lenders would be willing to give guaranteed approval for a bad credit personal loan. Borrowers with bad credit histories can have more complicated financial circumstances than other borrowers, so lenders will want time to study your application. 

It’s all about risk. When someone applies for a personal loan, the lender evaluates how likely that borrower would be to repay the money. Lenders are more willing to give personal loans to borrowers with good credit than bad credit because there’s a higher likelihood that the personal loan will be repaid. 

So a borrower with good credit is more likely to have a loan approved and to be approved faster, while a borrower with bad credit is less likely to have a loan approved and, if they are approved, may be approved slower.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.

What are the pros and cons of debt consolidation?

In some instances, debt consolidation can help borrowers reduce their repayments or simplify them. For example, someone might take out a $7,000 personal loan at an interest rate of 8 per cent so they can repay an existing $4,000 personal loan at 10 per cent and a $3,000 credit card loan at 20 per cent.

However, debt consolidation can backfire if the borrower spends the extra money instead of using it to repay the new loan.

How can I improve my credit rating/score?

Your credit score will improve if you demonstrate that you’ve become more credit-worthy. You can do that by minimising loan applications, clearing up defaults and paying bills on time.

Another tip is to get the one free credit report you’re entitled to each year – that way, you’ll be able to identify and fix any errors.

If you want to fix an error, the first thing you should do is speak with the credit reporting body, which may take care of the problem or contact credit providers on your behalf.

The next step would be to contact your credit provider. If that doesn’t work, you can refer the matter to the credit provider’s independent dispute resolution scheme, which would be the Australian Financial Complaints Authority (AFCA).

AFCA provides consumers and small businesses with fair, free and independent dispute resolution for financial complaints.

If that doesn’t work, your final options are to contact the Privacy Commissioner and then the Office of the Information Commissioner.

Can I get a personal loan if I receive Centrelink payments?

It is hard, but not impossible, to qualify for a personal loan if you receive Centrelink payments.

Some lenders won’t lend money to people who are on welfare. However, other lenders will simply consider Centrelink payments as another factor to weigh up when they assess a person’s capacity to repay a loan. You should check with any prospective lender about their criteria before making a personal loan application.

Which lenders offer bad credit personal loans?

Several dozen lenders offer bad credit personal loans in Australia. These are generally smaller lenders that aren’t household names.

How are credit ratings/scores calculated?

Different credit reporting bodies may use different formulas to calculate credit scores. However, they use the same type of information: credit history and demographic profile.

They’re likely to look at how many credit applications you’ve made, which lender the applications were for, what purpose they were for, how much they were for and your repayment record. They’ll also look at your age and postcode. They’ll also look to see if you’ve had any bankruptcies or other relevant legal judgements against you.

Your score can change if your demographic profile changes or new information is added to your file (such as a new loan application) or existing information is removed from your file (i.e. because it has reached its expiry date).

What is bad credit?

A person is deemed to have ‘bad credit’ when they have a poor history of managing credit and repaying debts.